Survey: Few Used Energy Tax Credit in ‘06

Article
Jun 12, 2007

A 2006 tax credit intended to help Americans defray the large increases in energy costs associated with heating and cooling homes was utilized by relatively few homeowners, despite awareness of the need for the home improvement purchases that underlie the credit.

A survey of 1,040 adults conducted for Johns Manville by Opinion Research Corp. reveals that while a high percentage of homeowners, 74 percent, were aware of the federal tax credit available under the Energy Policy Act of 2005, relatively few, 23 percent, took advantage of it for their 2006 taxes. This despite the fact that 78 percent of homeowners reported their 2006 heating/cooling costs increased 5 percent or more than their 2005 costs, and only 32 percent believe their home is already energy-efficient.

The Energy Policy Act of 2005 allows for a tax credit of up to 10 percent of the cost of materials for certain home improvements, such as installing Energy Star-qualified windows and air conditioners, or installing insulation and air sealing products. The law, which offers a tax credit of up to $500 per household, was created in response to record-high energy prices. According to the U.S. Energy Information Administration’s recently released Annual Energy Outlook 2007, energy prices are expected to increase steadily through 2030. The tax credit was available for the 2006 tax season, and homeowners can still take advantage of the credit with purchases made through December 31, 2007.

According to the Johns Manville survey, of the homeowners who took advantage of the tax credit, the most popular energy efficiency upgrade was adding insulation or air sealing (44 percent), closely followed by installing Energy Star-certified windows (40 percent).

According to the Harvard University School of Public Health, more than 60 percent of homes in the United States are underinsulated, and adding products such as attic insulation is one of the most cost-efficient ways to improve the energy efficiency of a home. The U.S. Department of Energy estimates that 40 percent of all air leaks in the average home are in the attic, and homeowners can expect to see up to a 30 percent savings on heating and cooling costs with a well-insulated and air-sealed home.

Kitchens & Baths

Cabinet sales off, but outlook remains positive

The nation’s residential remodeling market may be relatively stable, and steadily growing, but sales of kitchen cabinets and bathroom vanities are down significantly — a victim of continued softness in the market for new residential construction.

According to the latest figures released by the Kitchen Cabinet Manufacturers Association, sales of cabinets and vanities were down 17.1 percent in March from the level reported in the same month last year — with most of the decline in the stock cabinet sector, which fell by 24.3 percent. By comparison, custom cabinet sales were down a relatively small 8.4 percent for the month, while sales of semicustom cabinets were off by 9.9 percent. Overall, year-to-date cabinet sales were off 14.8 percent through March, said the KCMA, noting that surveyed participants include manufacturers whose combined sales represent more than 50 percent of the U.S. cabinet market.

The March declines, coming on the heels of four consecutive monthly declines prior to that month, are in sharp contrast to the 127 consecutive months of growth reported by the Reston, Va.-based KCMA prior to November 2006.

The declines, observed Dick Titus, KCMA executive vice president, mirror the market for new construction, where housing starts for the first quarter of 2007 were nearly 30 percent below the first quarter of last year. Housing starts rose 2.5 percent in April, to a seasonally adjusted annual rate of 1.528 million units, but were still down 16.1 percent from a year earlier, the government reported.

“Remodeling is softer than it has been, but the only negative, really, is new housing — particularly with the big builders,” Titus said, attributing the cabinet sales decline to regional factors, including poor weather, as well as to the ongoing housing slump.

According to the latest National Association of Home Builders’ forecast, a modest second-quarter decline in housing starts will be followed by a gradual recovery beginning around mid-year. However, the NAHB said it expects total housing starts for 2007 to be down by 20 percent from 2006.

Noting that some 70 percent of KCMA-member cabinet sales are in the remodeling sector, Titus said most cabinet suppliers remain optimistic and feel that the market, in general, is “at a sustainable level.”

“It’s not like things have fallen off a cliff,” he commented. “There’s still plenty of opportunity, particularly in remodeling.”

Titus added that most KCMA members have taken management measures — including adjusting production schedules — to protect themselves against the housing downturn. Most, he said, “are saying the current softness is not all that bad. It gives them a chance to catch up on management issues they can’t deal with when things are going gangbusters. Morale is good.

They’re optimistic. They feel confident that things will show improvement.

“Companies are moving ahead with factory improvements; they’re still purchasing equipment and technology. Some things have been put on hold, but there’s still a lot of activity going on.

“Long term,” he concluded, “the outlook is still positive.”

Sunroom Blog

Vinyl Tech Inc. launches blog to attract customers

Vinyl Tech Inc., a Hudson Valley, N.Y. home improvement company, has started a blog to disseminate information about home remodeling with a sunroom, solarium or conservatory. See the blog here: http://blog.sunrooms360.com. Damary Kiefer, company president, said, “This is an exciting time for this type of home improvement. With global warming and rising energy costs on everyone’s mind, we wanted to help spread awareness about utilizing a sunroom as a ‘green’ solution.”
Vinyl Tech’s marketing manager, Jeff Moretti, sees additional benefits to home remodeling with a sunroom, solarium or conservatory, “Folks can enjoy their homes more because they will have that gorgeous view of their yard while staying comfortable and not having to worry about insects and weather. People desire a place where they can experience the outdoors from comfort inside their homes. A Vinyl Tech sunroom is an energy-saving home addition that will quickly become the most used room of your house.”

Ms. Kiefer continues, “A Vinyl Tech sunroom addition adds beauty, comfort, and equity to any home. Sunrooms are a gorgeous way to combine the indoors with the outdoors while creating a relaxing environment. In areas with drastic temperature ranges, such as New York State , sunrooms are an even better choice. And we find that people just don’t know about all the benefits. Therefore, we started the Sunrooms 360 Blog.”

With most Americans, their home is their biggest investment. The Sunrooms 360 Blog was created to spread free information about the many benefits of adding the functionality, square footage, beauty, resale value and energy efficiency of any home with a sunroom.

Jeff Moretti continues, “Our quality sunrooms, solariums and conservatories offer energy-efficient, solar heat blocking properties which allow homeowners to maintain a comfortable interior temperature while saving on energy. Why . . . If people just KNEW about all the benefits of a sunroom, we wouldn’t be able to keep enough in stock to supply everyone!

That’s why we started a blog, we can’t fit all the information that we wish to convey on a mere Web site. I urge all homeowners to visit often.”

Vinyl Tech, Inc. is the home improvement contractor of choice for the New York State counties of Ulster, Dutchess, Putnam, Orange, Westchester, Rockland, Columbia, Greene and Sullivan. They are located at: 668 Dutchess Turnpike (Rte. 44), Poughkeepsie, NY 12603. To obtain a FREE sunroom design consultation please call: 800-758-6522. Visit their sunroom blog here: http://blog.sunrooms360.com

Windows

2007 survey results: What homeowners want from their windows

According to results of the Simonton Windows “Second Annual House of Windows Sweepstakes,” survey, consumers interested in window replacement projects have cited energy efficiency as the top factor for motivating them to replace their windows and as the single most important quality of their windows. More than 25,290 results were analyzed by Ventura Associates, Inc.

Results show that the importance of energy efficiency has grown for consumers in the past year, with a greater percentage citing energy efficiency as the main reason motivating them to replace windows (72 percent in 2007 vs. 69 percent in 2006) and as the single most important quality of their windows (71 percent in 2007 vs. 66 percent in 2006).

When asked how important it was to them that their windows were ENERGY STAR rated, 88 percent of respondents answered either “extremely important” or “important.” Maintenance-free came in second place with 11 percent, and security came in third with 6 percent.